Newscasts - Fed rate cut odds falling amid inflation concerns, strategist says
04/11/2025 21:43
Click the following link to watch video: https://share.newscasts.refinitiv.com/link?entryId=1_prjs7e6s&referenceId=tag:reuters.com,2025:newsml_RW942004112025RP1_930&pageId=Newscasts Source: 'Reuters - Business videos' Description: Rob Haworth, senior investment strategy director at US Bank Asset Management Group, says traders are scaling back bets on a December rate cut as inflation concerns persist. Short Link: https://lseg.group/4hSF36H Video Transcript: After the Fed meeting last week, we really saw expectations of a rate cut in December get tempered. We're close to 70% odds right now. I think that fear in the market that the Fed may not cut rates is being joined by some other concerns about kind of short-term funding markets currently where the short-term overnight financing rate is above 4% while the Fed is targeting a rate below 4%. So, there's some questions about short-term funding in the current market given Fed quantitative tightening, which is running through December 1, and whether the Fed will cut rates in December. I think both of those are acting on the market today. I think if the Fed comes around to December and doesn't cut rates, that tells a pretty tough story for inflation, right? We're seeing somewhat softer labor markets, kind of flat activity coming out of the ISM Manufacturing survey. We'll get the services survey tomorrow that's expected to be somewhat flat. And so, what, if the Fed doesn't move, that tells us that inflation is becoming more of a concern for them because activity is good but not accelerating at this point.